By Jan Strupczewski
BRUSSELS, March 21 Euro zone finance ministers
urged Cyprus on Thursday to say how it could reach a deal with
international lenders that would save it from bankruptcy after
the Cypriot parliament rejected the conditions of a bailout
Since the terms were rejected, the ministers expected Cyprus
to propose how it wanted to change the bailout, but the main
parameters needed to stay the same, Jeroen Dijsselbloem, who
chairs the ministers' meetings, said in a statement.
"The Eurogroup would subsequently, on the basis of a Troika
analysis that needs to be undertaken, be prepared to continue
negotiations on an adjustment programme, while respecting the
parameters defined earlier by the Eurogroup," he said after a
teleconference with ministers.
The Troika are the representatives of the International
Monetary Fund, the European Central Bank and the European
Cypriot lawmakers this week rejected an unprecedented tax on
bank deposits proposed as part of a 10-billion euro
($13-billion) bailout from the EU and IMF.
Euro zone ministers said on Monday the one-off levy on
deposits should only be applied to savings higher than 100,000
euros and they repeated that on Thursday.
"The Eurogroup reaffirms the importance of fully
guaranteeing deposits below 100,000 in the EU," the statement
The Cypriot government said party leaders had agreed to
create a "solidarity fund" that would bundle state assets as the
basis for an emergency bond issue, but the speaker of
parliament, Yiannakis Omirou, insisted a revised levy on
uninsured bank deposits was not on the table.
The governor of the central bank said it would impose a plan
to avoid bankruptcy at the second biggest lender, Cyprus Popular
Bank, but it remained unclear how measures would work.
The government submitted a bill seeking the power to impose
capital controls on banks, a type of measure unseen since before
the country joined the EU single currency bloc five years ago.
European Commission spokesman Simon O'Connor said there
appeared to be "an improved spirit of cooperation" by the
"In particular we welcome the Cypriot authorities'
assurances that they will present in detail ... their
alternative proposal for covering the part of Cyprus' financing
needs outside of the agreed financing envelope. Our staff will
assess this proposal carefully as of tomorrow morning," he said.
"We are conditionally satisfied that the bills on bank
resolution and restriction of capital movements are moving
through the legislative process ... These laws ... are
absolutely essential at the current juncture," O'Connor added.